§ Miss BeggTo ask the Secretary of State for Trade and Industry what changes he proposes to make to the Home Shipbuilding Credit Guarantee Scheme. [92465]
§ Mr. ByersI am pleased to announce today some significant improvements in Government supported shipbuilding finance under the Home Shipbuilding Credit Guarantee Scheme.
I am delighted to say that these improvements are one of the early outcomes of the Shipbuilding Forum, which I established last summer, to bring together all the major Industry, union and Government representatives to examine ways of improving the competitiveness of the shipbuilding sector. The Government are actively contributing to these outcomes. I believe that these 474W improvements, recommended by the Shipbuilding Forum, will put the UK Scheme on a par with the best finance schemes among our EU competitors.
The Scheme, which currently offers soft credit financing support in pounds sterling and at fixed interest rates to help UK yards win new shipbuilding orders, will now be extended to offer support for loans in US dollars and euros and to provide DTI guarantees in support of loans at floating as well as fixed rates. It is moreover our aim that the Scheme should be more flexible in its operation and to this end loans under the Scheme will be considered in a combination of the permitted currencies. The Scheme will also guarantee loans for periods up to 12 years (previously eight and half years) for mobile offshore installations, including floating production storage and offloading vessels.
Floating rate loans will be of particular assistance as it allows shipowners to take advantage of the current low interest rates and make the Scheme more competitive and attractive to all.
Loans in US dollars recognises that shipbuilding is an international business and that the US dollar is the most widely used currency for financing the building of ships. It will bring our UK Scheme in line with other similar EU competitor schemes which already offer loans in US dollars as will the extension to loans in euros.
I am certain that these new financing arrangements, which the Industry have called for, will help strengthen the hand of the UK shipbuilding sector. The Government will continue to give the Industry every encouragement to improve its competitiveness and I look forward to working with the Shipbuilding Forum to ensure that we continue to achieve this aim.